Australian food wholsealer Metcash has reportedly asked the country’s competition watchdog to examine the prospect that its highly concentrated grocery market is contributing to climbing prices.
The company behind the IGA supermarket chain, Campbells Wholesale and Australian Liquor Marketers said that independent retailers were important in maintaining competitive tension.
“Maintaining competitive tension is vital to ensuring low prices for consumers and to prevent the abuse of market power by the major supermarket chains,” Metcash said in a submission to the Australian Competition and Consumers Commission (ACCC) grocery inquiry.
By some estimates, Australia’s two largest grocers Woolworths and Coles account for 80% of the country’s grocery market.
Metcash stated that independent retailers can compete with the two supermarket giants and would be able to expand if more suitable sites were available.
Penalty clauses in contracts between landlords of shopping centres and Woolworths and Coles blocked the entry of competitors, Metcash claimed.
The ACCC is expected to provide its report on grocery prices by 31 July.